"hardball" starts right now. bad numbers. let's play "hardball." good evening, i'm chris matthews in washington. leading off tonight, you can just imagine the glee republicans felt this morning when the terrible jobs numbers came out. the unemployment rate ticking up a tenth of a point and only 18,000 jobs created last month. tim pawlenty, romney, all them had to say this. here's romney. they all had their i told you so quotes ready. and orrin hatch from utah said yesterday, it's time for the poor to, quote, share some of the responsibility. could that be the new republican talking point, that the economy is struggling because the poor aren't paying enough in taxes? the economy and the race for the white house is our top story tonight. also, is president obama ready to give away too much in

talks with republicans? some democrats worry the president will give away the store on medicare, medicaid and social security without getting much in return. are they right? cowell could he get a better deal? right off the cliff. terrii the tea party, they're willing to tank the economy in order to avoid a challenge from the right? we'll debate that one. the news of the world scandal is a political scandal in london. former senior aide to britain's prime minister david cameron has been arrested in a growing scandal involving phone hacking and corruption. finally, let me finish with the space shuttle launch today and the wondrous pioneering president jack kennedy once championed. we start with the jobs numbers. david corn, msnbc political analyst. michael steele is the former chairman of the republican national committee. now an msnbc political analyst. welcome. did you hear the glee, the giggles of delight on your side of the aisle? come on.

michele bachmann said she hopes the bad numbers help her. >> no, no. >> she said that. >> i know what she said. let's just get serious for a moment. you had 18,000 jobs created last month. the 54,000 for may was the revised down to 25,000. the reality of it is americans are still hurting and both the administration and members of congress and the republican leadership, in particular, we can't paint specifically on job creation, need to get serious about this. all the talk about the debt and all the dancing belies -- >> you think the debt is an important issue? >> the debt is an important issue. in the context of job creation, it all has to work together. you cannot do it in isolation. >> let's take a look. here's the aforementioned u.s. congresswoman michele bachmann on cnbc today on the jobs numbers. let's listen to what she said and what michael said she didn't say. let's listen. >> does it strike you that as the unemployment rate goes up, your chances of winning also go up? >> well, that could be. again, i hope so.

my candidacy is one that i'm presenting to be a job creator and to turn the economy around. >> is that politically acceptable today to say you hope you benefit from bad economic news? that people are thrown out of work? she just said, i hope so -- >> i think she's -- you can run it again. i think what she's saying, she's hoping her message about job creation is one that allows her the chance to compete and win the office. >> he said are you hoping -- >> it's no different than barack obama running around in 2008 talking about what he thought the opportunities -- >> she said i hope it does help me. >> there's a serious discussion to be had here. a couple months ago when the job numbers were good, what were the republican leaders in congress saying? see, you elect us and the numbers go up. now they're blaming barack obama. what's happening is -- >> the job numbers have not been good. >> when they were better at the beginning of the year the republicans tried to take credit. when they're bad -- >> he went along with the bush tax cuts. >> that's what they're talking about. that's the only option they have. i'm happy to hear you talk about

job creation. all we hear from the republicans is is reduce government spending and cut taxes. taxes are at a historic -- let me finish. they're at a historic low. if you cut government spending you end up contracting demand. that's a job loser. it doesn't create jobs. >> it does create jobs. fundamentally creates jobs. >> no, it doesn't. most of the jobs lost are public jobs. you have teachers being fired. >> how do you expect an employer to spend more money when you're taking more out of his pocket? >> you're not taking -- >> if you're cutting his taxes -- >> taxes are low now. >> i have to get something straight here. >> taxes right now -- 39%. they're going to 45% over the next 18 months based on what's -- >> marginal rates are 35%. >> 45% in 18 months. >> you run a small shoe store. customers start pouring in the door some weekend. you hire a couple people to help sell shoes, right? it's about demand. taxes go up 3%, 4% for the

richest people in the country. you don't fire people. who's coming in to buy? sales and consumer demand drives the economy and drives the number of people higher. >> it's not just sales and consumer demand that's driving this. you have an entire network, if you will, of business opportunities out there that have not been a part of this discussion for the last -- >> there's a difference in values. let's take a look at senator orrin hatch wednesday talking about shared -- here's a senator of the united states under pressure from the tea party. a guy who has always been a conservative but now fearful of the far right, tea party people, afraid to say what he normally would say back when he was partners with ted kennedy. here's something he would have never said before. let's listen. orrin hatch. >> i get a little tired of hearing the obama approach toward shared sacrifice. the top 1% of the so-called wealthy pay 38% of all income tax. the other sides just spends and spends and spends and want to tax and tax and tax so they can spend some more. my gosh. when are we going to wake up in

this country and realize they're spending us into bolivion? i hear how they're so caring for the poor and so forth. the poor need jobs and they also need to share some of the responsibility. >> you know, the latest republican carp out there is that democrats don't tax the poor enough. and they're saying that half the people don't pay tax. the fact is that 82% of the country -- >> they don't tax the poor enough. >> what's he talking about there? >> what he's acknowledging is that as just recently reported by the joint committee on taxation, 51% of american households do not pay income tax right now. >> they pay payroll tax. >> the fact of the matter is -- that's social security. that's not enough. let me finish the point. i'll let you do your thing. the reality of it is 51% of american households, taxpayers, don't pay taxes. what you're talking ant is a shrinking number of people contributing to the overall

investment through tax policy in this country. you don't have that. so if you have 51% of taxpayers that don't pay, you're looking at a smaller and smaller number. >> let him finish. >> what the senator is talking about is creating an environment in which the poor are empowered to get jobs so they can contribute taxes and so forth. getting a job to pay more taxes -- >> that's not what he said. >> that is what he said. i talked to the man. i know exactly -- >> he just said hay althey also to share responsibilities. >> once they get jobs. he didn't say -- >> he did. wait a second. >> this is the first part of what he said. the poor need to get jobs. >> he said the poor need jobs and they also need to share -- >> that's part of that responsibility. >> come on, people. >> when you say 51% don't pay income taxes, what is your suggestion? we should put more income taxes on those people at the bottom rungs? that's the solution? >> no, he said the tax system is

upsidedown. >> should we raise taxes on people at the bottom half of the country? >> no. no. i don't think we should -- the bottom line is let's -- look at the tax code as is constituted right now and fix those areas that need to be fixed and will allow more revenue to flow as opposed to giving the tax breaks and the loopholes. >> what we hear from the republicans again and again is the economy is in trouble, let's cut taxes. we did that during the bush era -- >> let's stop yelling. i want to -- this program is about documenting. first of all, michele bachmann, the congresswoman, really did say she hopes she does win, benefit from higher unemployment. she said i hope so. i hope i benefit politically from -- >> i don't think -- >> she said it again and again. i'm not going to play it again and again. let's play it again. let's watch it again. let's hear her speak for herself. congresswoman bachmann. >> does it strike you as the unemployment rate goes up your

chances of winning office also go up? >> well, that could be. i, again, i hope so. my candidacy is one that i'm presenting to be a job creator and to turn the economy around. >> the economy, yes. >> and so everybody in this town has been asking -- making the very -- >> let him talk. >> everybody in this town is making the very obvious statement. well, barack obama is in trouble if the unemployment rate stays at 9.2. if it doesn't get below a certain rate. that's all she is acknowledging at 9.2% -- >> she hopes she benefits -- >> she didn't say she hopes the economy gets better. >> you don't think -- >> okay. let me ask you this. let me -- then, again, here's orrin hatch. "i get a little tired of hearing the obama approach toward shared sacrifice. he's complaining about the rich being blamed. he is now saying the poor also need to share some of the responsibility. go ahead. >> when you talk about shared sacrifice, you look at what the republicans want to do in the ryan budget which is have $1 trillion in tax cuts while

cutting medicare, medicaid, food safety, education, medical research -- >> obama has already cut medicare. >> no, he didn't. >> $500 billion. oh, he transferred. that's washington, folks. we transferred funds. >> we gave them money -- >> we didn't cut. they transferred funds. >> hey, can i finish? >> seriously. a half a billion dollars. >> can i finish one point? >> yes, i can. >> that money was used to plug the donut hole. >> oh, yeah, donut hole. >> you want to make fun of that? >> i'm not. it's that your washington speak is not the reality for people out there. >> just to make one point, i want to show a collage of all the republican candidates for president now. we're going to start now with -- we showed bachmann. let me quote what other people are saying. let's talk about the other -- i think they think they're gaining here. this is about how they reacted. we have romney. "today's abysmal jobs report confirmed what he all know, that president obama has failed to get the economy moving again."

jon huntsman's statement roads "the american people have been extraordinarily patient in waiting for the better and brighter times promised to them by this administration. their patience has rightly worn thin." tim pawlenty's statement, "we will have continued anemic growth and disappointing job creation so long as barack obama is president." your party was clearly ready to jump on it. >> absolutely. that's the politics of running for president, chris. don't act like this is something new and fantastic and no democrat is ever -- demagogue -- >> are you rooting for bad economic times? >> i'm not. >> are they? >> no, they're not. at the end of the day, they're not. >> do you think they're hoping the economy is going to tank really bad, they can walk into the white house? >> i think some are hoping for that. i think some tea party members in congress now are willing to play chicken with the economy. >> i think so, too. >> and blow it up and they don't care, because you know what, if it happens -- >> fair enough. you made a charge. fair enough. you made a charge some tea party

people would rather have the economy go to hell in a hand basket this august with the world markets and interest rates spiking and the bond market dying and this country, joke world, just to make their point on taxes. you say that. >> yes. >> are there any liberals on the left coast out in california, in the bay area or the east coast in the new york area or black caucus, do you think there's some of them that are so adamant about not giving up on medicare and medicaid or social security that they'll let it happen? that they'll let it happen rather than get on those issues? >> that they'll let it happen. >> they won't agree to a deal sthat stops -- >> every one would vote for a bill and not play chicken with the economy. >> what about the other point? >> i don't think you should have to give up medicare to prevent a financial crisis from happening. >> give up medicare -- nobody's saying to give up medicare. >> no one said that. >> what do you mean? you're tieing the debt

ceiling -- >> the nobility of the left. the reality of it is -- the reality of it is the tea party folks out there are saying they're not saying we want to run the economy off the cliff. they want responsible leadership in there and making sure -- >> changing in the tax code, this president -- proposing -- are so modest, so marginal and the changes down the road in medicare and social security are going to be so modest all this stuff is tempest in a teapot. thank you, michael steele, david corn. it's going to be way down the road and the basic thing we have to do. coming up, is president obama giving away too much? we'll debate that one, too. we'll take tadavid's point here. progressives are worried, david and others, me, too, sometimes about any cuts to make, any social security adjustments. people say don't give up on nothing. [ male announcer ] this is america.

what makes our country great? our can-do spirit and our can-do cheese. kraft singles. this cheese rolls up its sleeves and gets the job done 'cause we're always made with milk and we're rich in calcium to help build 'em up strong! and fast! and, uh, talented. hey, our country put a man on the moon, maybe because we put our cheese on all our sandwiches. kraft singles. the american cheese.

the republican party is losing ground with two key voting groups right now. senior citizens and midwesterners. 45% say they're democrats. 35% say they're republicans. 44%, 35%. a nine-point spread for the democrats. last year the spread was only two points and republicans actually won the senior vote in the midterms. and in the midwest, the similar trend. this year 42% of midwestern voters say they're democrats versus just 31% who say they're republicans. that's a wide spread. 11 points. last year they had a four-point spread, the democrats. we'll see if both trends continue into next year's elections. mulates the world's toughest roads. ♪ [ tires screeching ] ♪ if it can survive this drive...

♪ it can survive yours. the nissan altima. innovation that lasts. innovation for all. ♪

we do not support cuts in benefits on social security and medicare. any discussion of medicare or

social security should be on its own table. do not consider social security a piggy bank for giving tax cuts to the wealthiest people in our country. we are not going to balance the budget on the backs of america's seniors, women, and people with disabilities. >> welcome back to "hardball." that was house democratic leader nancy pelosi on thursday. here's house speaker john boehner today. let's listen. >> there is no agreement in private or in public, and as the president said yesterday, we are this far apart. it's not like there's some eminent deal about to happen. there are serious disagreements about how to deal with this serious problem. >> how far apart are they? are the democrats worried president obama will give away too much to get a deal? mr. leader, you have a tough

job. i don't know how you're getting through this. i really mean this. i've heard a report today there's going to be some kind of effort to look at changes down the road that we can't cut taxes or rather raise taxes right now. we can't cut benefits right now because of the economy being so precarious. does that mean we're going to have to push the big changes to deal with the deficit and debt, going to have to go down the road a bit and to the long term, maybe more than ten years? >> chris, i don't know about more than ten years, but certainly as you know, simpson boles, senator simpson and former chief of staff irskin boles, in their report they proposed making substantial cuts, raising revenues and across the board with all items of expansion. but they said in the near term, meaning the next year of so, we need to be very careful that we did not have the opposite effect by dampening down the struggling economy, obviously, as we saw

today, which will decrease revenues and make the problem worse, not better. so in the short term, i agree with the bowles-simpson suggestion that we be very careful in the short term. there's no doubt, however, in the white house yesterday, or thursday -- yesterday -- there was a clear agreement that this was a serious, serious challenge that confronted us and it demanded at all of us try to come together and reach an agreement whereby we will certainly over the next 10 years and 20 years bring this deficit town and bring the debt down because it's not sustainable. >> do most of the members in your caucus agree that this is an urgent matter, that this is not a kabuki dance, that this august 2nd is a reality, you cannot afford to have the world money markets think of the united states as a deadbeat. >> absolutely. i think that the entire caucus,

to a person, believes that putting the united states of america in the position where it doesn't pay its bills will have ramifications to everybody in this country and around the world. as a matter of fact, i've told the speaker and i've told mr. cantor, the republican leader, that democrats would come up with at least 150 votes to make sure that we extend the debt limit so we cannot default and pay the bills that we have already incurred. so that i think the answer is emphatically, yes, chris, we believe this is a very serious issue and secretary figgeithner made it clear after august 2nd, there's no maneuvering room, we'll run out of ways to maneuver to pay our bills and we will be in default. that we cannot let happen. >> the president said the other day social security as well as medicare, they're all on the

table. how's that selling with your caucus? >> well, i think -- i've said many times everything needs to be on the table. leader pelosi has said the same. we have also said that we must not touch the benefits social security recipients are receiving or that undermine medicare benefits. we have not said that, therefore, they ought to be off the table. i agree, though, with leader pelosi, you just used her quote. social security has not been part of the problem. as a matter of fact, social security up until this year has been, as you well know, chris, providing surpluses which we have used. so social security is not the problem, but we do need to strengthen and make social security sustainable over the long term, but we need to consider social security on its own merits without adversely those getting benefits. the fact is everything needs to be on the table but not every facet of everything should be on

the table. we don't think -- i agree with leader pelosi, we don't certainly want to look at reducing health care costs for people or reducing social security benefits because we want to give large tax cuts to the wealthiest in america. that's not, i think, a policy that the american public thinks is either smart, or frankly, moral. >> it's going to be a tough couple days. thank you so much. u.s. congressman steny hoyer, house democratic leader. >> thank you, chris. joining me now, democratic senator mark warner of virginia. on the banking, budget and commerce committees. senator warner, i was wondering in the course of the -- as we get closer and closer to the deadline on the action of the debt ceiling legislation, why are we not hearing from big business? why are we not hearing from tom donahue of the u.s. chamber of commerce demanding action to avoid a default? >> ychris, as you know, and man of your viewers, i'm a pro-business democrat out there.

i'm pulling my hair out on that same reason. we've seen the power of the business community to weigh in on issues. there's not a business leader i've talked to. i've talked to the chamber, the brt, every business group i can get in front of. many times what saxby chambliss was saying, be a balanced approach, both sides of the sheet, revenues and cuts. we get a lot of atta boys, but we don't get the meaningful involvement i think will convince some of our republican colleagues and our reluctant democratic colleagues that we're driving over the cliff and can't let this happen to our country or our economy. >> let me ask about hearing back from them. does business at the highest level, big money people, do they know -- do they talk to you about the consequences of the failure to meet this deadline? >> i think they think the consequences are so dire that no responsible person wouldn't vote to extend the debt limit. they think this is, again, political kabuki theater we're

going through. some of it is. i acknowledge that. i wish we would put down the bartering and get to a real deal here. i wroread an op-ped in the "washington post" saying, guys in the business community, we need you to step up, we need you in the halls of congress. an increase in interest rates, a factored in higher credit risk for everyone does not do anything in terms of job creation. as a matter of fact, 10% mortgage rates, 13% car loans, the trickle down that would happen on every state bond. those will be imperiled as well if we end up defaulting on our treasury notes, this would hurt local government, state government as well. they need to be here because this would be a knife to the heart of any meager recovery we've got. >> let me ask you about -- you probably don't want to give away your bargaining position. what about issues, like, down the road social security. not now. we don't have the crisis in social security. we can look at it about who's going to be retiring over the next 20 years. we know it's going to face a crunch then go into default and

deficit. medicare is on that road to real catastrophe. we know the challenges are ahead. do you think the democratic party -- if they're willing to compromise on taxes. real increases in taxes. >> not everyone, but i have to tell you, i believe the numbers don't lie on this. we're spending too high, 25% of our gdp. our revenues are at an all-time or 6 o-year low at 15%. it doesn't take a rocket scientist to realize you have to move up in revenues and down in spending. i'm one of those democrats who think entitlements have to be part of discussion. if there is social security 50 years from now, if we make sure there's a medicare program that protects our seniors in terms of health care, we have to make changes on this. it's not either party's political fact but demographics. >> is there an argument to go right into august, right into the jaws of defeat, really, for our economy, spiking interest

rates, bond market, vigilantes, everybody exploiting the situation. america being watched and degraded in the eyes of the world like we're portugal or ireland or greece? is there anybody that sits in the left or right and says, let's do that? >> i hear from some of the guys, i don't get what the problem would be if we had a short-term default. the thing that is so fundamentally just bizarre to me is we're not going to even have the chance to get to august 2nd. we're going to see sometime in the next two weeks, particularly when there's a bad day in europe, let's face it, europe is not getting their act together any better -- >> right. >> -- where folks in new york are going to say, let's start going short. let's go ahead and start betting against america. that could end up with a snowball effect and let's face it, unlike the crisis of two years ago, we don't have the ability for the fed to kind of ratchet down interest rates anymore. we don't have the ability of another financial bailout, another financial stimulus. we have to take this problem on now head-on. i think it needs to be more than $4 trillion over a 10-year

period. i think that would do more to create jobs, get some of that $2 trillion in cash sitting on the balance sheets off the sidelines, back reinvested in this country. thus is a real moment of truth for the whole country. >> it's great to have a democrat who can talk to business. thank you very much, senator mark warner of virginia. >> thanks, chris. >> that was impressive. coming up, tim pawlenty's lame explanation about why he's failed to catch fire. that's next in the sideshow.

back to "hardball." now for the sideshow. first up, great expectations once seen as a front-runner, tim pawlenty has slipped to sixth place in iowa. a must-win state for him. what happened? pawlenty told the editorial board of "the des moines register" this. "this week is the first time i've campaigned in earnest in

iowa." really? according to "the des moines register" pawlenty campaigned in iowa more than any other candidate besides rick santorum. the real problem is pizzazz or lack trofr. one of his advisers said to michele bachmann, quote, ed sex appeal, a comment pawlenty quickly apologized for. bachmann's response? >> well, listen, i'm 55 years old. i've given birth to five kids and raised 22 foster kids. that sounds like good news to me. >> well handled. to tonight's big number. big cuts over at the white house you could say. white house. the 50-foot-tall iconic elm tree on the north lawn was chopped down after being damaged in a thunderstorm this past sunday. how long had it stood at the white house drooiway? 29 years. a teenage tree when it arrived at the white house. it was planted under ronald reagan back in '82. a big change in landscape at the white house. 29 years of history coming down. tonight's big number. up next, right off a cliff,

the tax tea party right is pushing republicans away from any deal on the debt. are republicans willing to tank the economy to keep their base happy? every day you live with the pain of moderate to severe rheumatoid arthritis could be another day you're living with joint damage. help stop the damage before it stops you by asking your rheumatologist about humira.

for many adult patients with moderate to severe rheumatoid arthritis humira has been proven to help relieve pain and stop joint damage. humira's use in patients with ra has been evaluated in multiple studies during the past 14 years. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events can occur such as, infections, lymphoma or other types of cancer, blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure. before starting humira, your doctor should test you for tb. ask your doctor if you live or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection.

make today the day you talk to your rheumatologist. and ask how you can defend against and help stop further joint damage with humira.

i'm sue herrera with your cnbc market wrap. stocks ending lower today on that dismal june jobs report. the dow jones industrials sliding 62 points and that's well off the worst levels of the day. this s&p 500 falling about 9 and the nasdaq giving up 12 points. horribly disappointing and ridiculously bad is how one analyst described today's unemployment report from the labor department. employers added 18,000 jobs in june, well below expectations, and the unemployment rate ticked

up to 9.2%. and it was the private sector accounting for all of the jobs created. while in the public sector state and local governments continued their slow bleed. in stocks, casinos and resorts were among the few winners today after jp morgan raised its price targets for the sands, wynn and mgm grand. investors are looking ahead to the start of earning season next week hoping for a second consecutive quarter of double digit earnings growth. alcoa kicks it off after the closing bell on monday. that's it from cnbc. we're first in business worldwide. now back to "hardball" and chris. this is america. how many of you people want to pay for your neighbor's morning that has an extra bathroom and can't pay their bills? raise their hand. president obama, are you

listening? we're thinking of having a chicago tea party in july. all you capitalists that want to show up to lake michigan, i'm going to start organizing. >> that's of course rick santelli of cnbc, creating the name, at least, for the tea party. that was, of course, the infamous battle cry back in 2009. since then, the tea party's effectively taken charge of a big chunk of the republican party. could the republicans' big engine blow up on them? josh has a piece in theatlantic.com. tough stuff. josh joins us with a familiar face here, the president of freedom works, one of the largest tea party organizations. josh, make your charge. >> well, my charge in the column is that the tea party has actually won with a great victory already. if there's any kind of a deal, $4 trillion or $2 trillion owed largely to the effect of the tea party. democrats control most of washington. here we are talking about what hardcore conservative tea

partyers want to be talking about, cutting federal spend. what i argue in the column, if tea party pressure forces republicans to default on the debt, they're not only going to take down the economy, but they could take down the republican party with them. >> your reaction to that, matt? >> well, i do think that the tea party has changed the conversation in washington, d.c. we couldn't be talking about the debt. we wouldn't be talking about the spending problem if it wasn't for the tea party revolution the last two years. i think the focus on the debt ceiling is a little wrongheaded because the crisis is with the debt. >> wait a minute. i want to ask you about the fact question. do you think the deadline for action on the debt ceiling is real? >> yes, i do. >> you believe if we don't do it, there is going to be a real crisis in the world? >> there's some give. treasury does have some ability to move things around, but eventually we will have to raise the debt ceiling. >> we have to have a deal? >> have to have a deal. >> are you willing to go as far as jeff saying, with a death/suicide pact of saying, we will bring down the government

if we don't get our way on taxes? >> understand, washington won't fix this problem until they've exhausted every other conceivable possibility. they're posturing now. they don't want to cut spen spendsing. this is all talk. what the tea party is doing, it's a citizen army of pressure forcing politicians to do something they don't naturally want to do, which is cut the deficit and cut the debt. >> agree. >> if we don't do something big, if we don't do something bold and something real, unlike what happened with fiscal '11 debates, we will not get out of what looks like a real sovereign debt crisis for our country. >> i want to quote david brooks. quoted over the pst few years. this is david brooks from "the new york times." the republican party has been infected by a faction that is more of a psychological protest than a practical governing alternative. if you ask them to raise taxes an inch to cut government spending by a foot, they'll say no. to members of this, tax levels are everything. members have taken a small piece of economic policy and turned it

into a sacred fixsatioation. if you were offered for revenue increases of some kind, would you say no because you don't want revenue increases? >> i would love to do tax reform. i hate the fact we use it for social engineering. number four on the contract from america, which is a tea party manifesto of sorts, is fundamental tax reform. so we're all for that, but this is a spending problem. this is a -- >> you would accept a very good deal? >> why would you -- >> would you accept a deal? >> why could you wow taould you revenue -- >> no, in other words, saying we won't accept revenue increase under any deal. >> i'm saying if they put real spending on the table then we can start talking. >> okay. so it sounds like he's not part of the suicide pact? he's willing to deal? >> that's depends. there's going to be negotiations

this sunday. they're going to come out with some deal. it has to include revenue raisers. >> some of people who are not going to deal. it seems to me there are people who want to deal on the reasonable circumstances. reasonably good deal for the conservatives. and some who wouldn't mind catastrophe. one of them i believe is eric cantor who i believe wants to be speaker. here he is today. let's listen. >> look at these job numbers. i mean, think now is the good time to raise taxes on small businesses and working families? they've got to be kidding if they think now is the time to raise taxes. so, again, i'm hopeful that on sunday we can all get together and realize you can't raise taxes but get the spending cuts done that we can get done. let's go in and make the changes to the obligations this country's got out into the future so people can regain their confidence and know that we have a government that is responsible in the stewardship

of taxpayer dollars. >> his posture is, tell me if it's true, is he part of the suicide pact, is he leading the tea party? is he saying, not no taxes in the short term. i don't think anybody wants short term taxes during this continued bad time. but if he's against any revenues at any time in the next ten years, i think he is part of a suicide pact. >> he's trying to court the tea party movement. i think he could be. he's also conflating to things here. nobody's talking about raising taxes. they're talking about what matt talked about. >> revenues down the road. >> revenues down the road could be -- it isn't necessarily ranging marginal income tax rates. >> let me ask you about some of the people, recruits like st. paul on the road to damascus. i would say they're converts of, well, dramatic change in their lives, not to knock st. paul, my hero. of course, all our christian heroes i should say. but orrin hatch who's a classic, established conservative, has decided he's a real tea party

favorite right now. is he one of the guys now who's saying, no -- tax the poor but stop taxing the rich and what do you make of his latest conversion comments? >> well, there's actually a six-year orrin hatch cycle where every fifth year he rediscovers his fiscally conservative roots. you're sees a trend we've seen for 35 years. i think the bottom line is that neither republicans or democrats ever want to cut spending and they respond to political inc t incenti incentives. >> explain that to the public. we have a politically astute audience on "hardball." i accept you're a man of the right. i think you're authentic. why do people who are in public life hate to cut spending? everybody hates to cut it. >> that's how you buy votes, buy re-election and how you grow your power. there are constituencies all over america that represent every little piece of the federal budget. >> so you accept it's not waste and fraud? you're not into one of those people, all you have to do is cut spending is get rid of waste

and fraud. you realize every check is made out to mr. and mrs. somebody, that somebody is getting those checks. that's why they don't want the spending cut. >> there's a lot of special interest getting those checks. >> there are people written out to people, they want the money. >> everybody wants the money. >> this is a big development sbrek intellectually, the checks are going somewhere. >> sure they are. maybe they're going to defense contractors, maybe they're going to ethanol corporate magnets. all these things need to be -- >> you're the real thing. you're the real thing, matt. thank you for coming on. josh, thanks so much for this warning. up next -- by the way, you got along in the greenroom. up next, over in britain, news of the world, that trash paper that comes out on sunday that everybody buys about scandal, it's out of business. and one reason is a former top aide to prime minister david cameron, h e used to work there, has been arrested. how cozy are the tories, the governor party in britain right now, with ruppert murdoch's empire which includes fox television and just recently

"the news of the world"? this is "hardball" only on msnbc. an accident doesn't have to slow you down. with better car replacement, available only with liberty mutual auto insurance, if your car is totaled, we give you the money for a car one model year newer. to learn more, visit us today. responsibility. what's your policy?

well, casey anthony's release date from jail has been pushed back four days. she's now set to go free next sunday. officials in florida say anthony refused to see her mother who scheduled a jailhouse visit. refused to see her. anthony's stunning acquittal earlier this week has given momentum to online petitioning calling for major changes to missing children laws in this country. supporters say caylee's law, named for anthony's 2-year-old daughter, would make it a federal crime if parents fail to notify authorities of a missing child within 24 hours or a child's death within one hour. we'll be right back. [ male announcer ] at nissan, we test the altima's durability

on a track that simulates the world's toughest roads. ♪ [ tires screeching ] ♪ if it can survive this drive... ♪ it can survive yours. the nissan altima. innovation that lasts. innovation for all. ♪

>> the truth is, to coin a phrase, we've all been in this together. the press, politicians and leaders of all parties, yes, including me. >> well, we are back. that was british prime minister. today is the scandal hit his own team. his former top communications aide was arrested in connection with phone hacking and prieb bribery for reporters. for more on this, bomb shell across the pond, let's bring in reporter from the london daily. tell the american people right now who aren't up on this, what is the scandal involving hacking and cell phones and whatever that really caused this scandal to explode. >> just an incredible story. people in britain are talking about nothing else. it goes back it 2006 when a

royal correspondent for the news of the world was arrested, accused of tapping phones of prince william and other members of the royal family, pleaded guilty. an investigators pleaded guilty as well, went to jail for short periods. that time it was contained and the police said it was just a rogue reporter and news of the world said it was a rogue reporter. two years ago, the guardian newspaper in particular followed by the new york times started to investigate this. it became more and more clear there were more people involved and a lot of people's phones being hacked. on monday it went beyond politicians and celebrities and footballers. it turned out that victims of terrorism, relatives of soldiers who had been killed and the phone of a missing 13-year-old girl who subsequently turned up to be murdered, they were all hacked. then there was just really public outrage over this. >> and the horrible wrinkle in

this is that people thought this young girl yas still alive because her phone messages were being taken off by somebody. was the newspaper. >> yeah. absolutely. it wasn't just the morality of it. but the practical implication of the police thinking, the girl is accessing her own phone. she is deleting messages. maybe she is still alive and the age wish that that caused the family. >> how is this connected to the british government right now? >> well, not just the tory government but governments going back for one, two decades, have caught it, rick murdock, news international and believe that they couldn't get to existing power without murdock's support, really and the support of big newspapers. >> is murdock hated in britain? what's the image of the guy here? here he is polarizing, the right wing like him -- >> it is the same in britain. he has taken a big dive this week. >> he closed down the smutty newspaper, the news of the world, this week. >> yeah, but it could be a

tactical move. >> to allow the sun -- >> to allow the sun to publish on the seventh day. and to sort of cut off the limbs -- >> well here we is, prime minister cameron speaking today but b his former aid who was arrested today. let's listen. >> first, andy coalson who worked for for years as my director of communications, he resigned from "the news of the world" because of what happened on his watch. he decided to give him a second chance. the second chance didn't work out. the decision to rehire him was my decision and mine alone and i take full responsibility for it. >> what do you mean it didn't work out giving this guy a second chance. >> well, whether cam ran knew, there was much more to it.

cameron was warned by many people that phone hacking scandal was much bigger than what coalson said. >> will this hurt the government? bring it down? >> i don't think it'll bring it down, but this story has a long ways to run and cameron is in really deep trouble. >> thank you for coming in. when we couple back, let me fin wisht final take off of the space shuttle. you're watching "hardball."

let me finish tonight with today's take off. the last take off of the u.s. space shuttle. this is the beginning after long dry spell in american space travel. how fitting or faithful that the atlantis shuttle took off from the same launching pad and the apollo astronauts once did. let's listen to the president who did the launching back then. here is jack kennedy at rice university back in '62. >> the exploration of space will go ahead. whether we join in it or not. and it is one of the great adventures of all time. and no nation, which expects to be the leader of other nation, can expect to stay behind in this race for space. >> here he is offering up that same go-for-it spirit that he and america once per son i'd

fooid. >> some say the moon, why choose this as our goal? and they may well ask, why climb the highest mountain? why 35 years ago fly the atlantic? why does rice play texas? we choose to go to the moon. we choose to go to the moon. we choose to go to the moon in this decade and dot other things, not because they are easy, but because they are hard. because that goal will serve to organize and measure the best of our energies and skills. because that challenge is one that we're willing to accept, one we are unwilling to postpone and one we intend to win and the others too. >> the question, is it yours sb is whether this country is still